Retirement Planning Misconceptions

Six in 10 Americans underestimate life expectancy and almost half (49 percent) underestimate the amount of pre-retirement income theyÃ¢â‚¬â„¢ll need once they retire. The MetLife 2008 Retirement Income IQ Test also reveals that almost seven in 10 (69 percent) pre-retirees overestimate how much they can draw down from their savings Ã¢â‚¬“ with an alarming 43 percent saying they believe they can withdraw 10 percent or more each year while preserving their principal. This is despite the fact that most retirement experts suggest a withdrawal rate of no more than 4 percent annually. MetLife said the lack of understanding is particularly concerning because poor retirement planning assumptions are compounded after retirement by todayÃ¢â‚¬â„¢s much longer life expectancy. The study findings also point to a gender divide with 65 percent of men vs. 50 percent of women somewhat or very confident that they will have enough money to live comfortably if they live until 85 years of age. To get a better picture of your current financial situation and work towards your financial goals, check out I.I.I.Ã¢â‚¬â„¢s personal finance software at http://www.myfinancialhouse.org/